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View Full Version : How are cost drivers selected in activity-based costing systems?


Immrtal1
Apr 7, 2007, 02:43 PM
As stated: How are cost drivers selected in activity-based costing systems?

CaptainForest
Apr 7, 2007, 11:47 PM
They can be selected in many different ways.

One tends to select them based on some criteria that makes the most sense.

You want some sort of correlation between the activity base and the cost stuff.

For example, If I manufacture shirts by sewing them, I should probably use direct labour hours and not material as my cost driver.

Immrtal1
Apr 8, 2007, 06:44 AM
Thanks for your help in both questions!